Typically, person-to-person payments are conducted with cash or personal checks. In most instances, the seller or service provider prefers cash since it offers a level of payment assurance not generally afforded to personal checks. Conversely, payment via personal checks is shrouded in uncertainty because the seller or service provider is unaware if the check is negotiable.
Negotiability of a personal check is brought into question due to issues such as fraud, insufficient funds and the like. Fraud may be exhibited in the form of a buyer trying to pass checks that they are not authorized to use (i.e., stolen checks or the like). Additionally, fraud may include passing invalid checks, such as counterfeit checks or mocked-up checks, in which the check stock, such as the routing number, account number or the like, has been nefariously altered. In other instance, fraud may involve trying to pass a check previously presented elsewhere.
Retailers attempt to circumvent problems associated with accepting personal checks by employing third party check guarantee services, such as TeleCheck® or the like. In practice, the retailer scans the check, sends the check data to the check guarantee service, which then compares the check data against industry-wide fraud databases to insure that the check is not associated with fraudulent activity.
In person-to-person payments, the payee desires the same level of confidence that the personal check is negotiable. Specifically, the payee desires a level of certainty that the check is not fraudulent and/or that sufficient funds exists in the related account. Person-to-person payments may be conducted at any point in time and at any location (e.g. paying for services provided in the home or paying for merchandise at a garage sale), as such the retail model, in which third party guarantee services require dedicated hardware, is not feasible in the person-to-person scenario.
Therefore, a need exists to develop systems, method and the like for verifying the validity of checks and, specifically, checks being used as payment in person-to-person transactions. As such the desired systems and methods such provide for on-the-fly check verification regardless of where and/or at what time the transaction occurs. The desired systems and methods should validate the check in terms of insuring that the check is not fraudulent and, in some instances, providing certainty to the payee that the requisite funds currently exist in the related checking account. Moreover, the desired systems and methods should provide the payee with an efficient and simplistic means of determining the validity of a check. In addition, to verifying the validity of the check, the desired systems and methods should allow for the payee to automatically deposit the check, in the event that the check is determined to be valid, thereby hastening actual payment of funds to the payee.